Recently, an associate sent me a chart of the TSX Venture Composite’s performance, and it wasn’t the one above. It was a one-month chart, which, if you look at the last inch of chart on the right, above, is certainly not a pretty sight.

But stepping out to the three-year view, as in the chart here, the sentiment is reversed. Not only does the drop caused by external factors not set us back any more than a year, it shows that the TSX Venture, on a year-over-year basis, continues to outshine the major U.S. indices by at least 60%.

And the ability to retain the macro view as the top priority is the key to successful investing. The bursts of economic upset that makes for steep curves on charts are relatively short-lived events. In the context of years, they appear as little spikes in larger directional trends.

Considering the likely further damage to the broad market from continuing loan defaults and the derivative nightmare they have spawned, I don’t think there’s going to be a hell of a lot of demand for HECBs or Highly Engineered Securitized Boondoggles--a much more appropriate and revealing anagram than the now ubiquitous ABCP (Asset Backed Commercial Paper) or the now notorious Collateralized Debt Obligation (CDO). What this means is increased demand for ILTAVQ’s (Investments Likely to Appreciate in Value Quickly), a category that TSX Venture-listed mining stocks readily fall into.

The announcement last week of a $2.1 billion investment in Sherritt International (TSX:S) is proof positive that the demand for metals is essentially unaffected by the global liquidity crisis.

The lenders, based in Japan, Korea, Europe, Canada and Africa, have set conditions before the cash can begin to flow, which is expected some time later this year, Sherritt said Friday.

Toronto-based Sherritt, which will operate one of the world’s largest nickel projects, owns a 40 percent stake.

Late last Thursday, Japanese trading company Sumitomo Corp. and three partners, including two major Canadian companies, announced plan to invest about $3.3 billion to develop the project.

Sumitomo and South Korea’s Korea Resources Corp. will partner with Toronto-based miner and SNC Lavalin Inc., the major Montreal engineering firm, to develop the mine, build smelters and create shipping infrastructure.

Production is expected to begin in the second half of 2010, said Sumitomo, which has a 27.5 percent stake.

Korea Resources holds 27.5 percent while SNC Lavalin holds the remaining five percent.

Once it becomes fully operational in early 2013, the facility will have an annual capacity of 60,000 tonnes of nickel, 5,080.32 tonnes of cobalt and 172,368 tonnes of ammonium sulphate.

Demand for nickel and cobalt, which can be converted into alloys, has been increasing in recent years for use in electronic devices.

The brokerage arm of Bank of Montreal, which has long had a focus on mining, has hired two analysts from Sydney and is moving them to Toronto to bulk up its global mining group.

So, obviously, the TSX Venture is going to see a lot more investment in the near term.

New Level Playing Field

Here’s a phenomenon that is reshaping the world’s financial landscape.

The young guns at the top of the financial food chain, who come from well-heeled families, who have aced Ivy-league MBAs and economics programs, and whom you see getting into the black livery limos lining the curbs on Wall Street and Bay Street every trading day, collectively divert a good 90% of the available investment capital into instruments that they manage, and, through their incestuous relationships with the companies responsible for “rating” the safety, or risk, associated with these instruments, are able to put vast quantities of these securities into the accounts of unsuspecting investors.

I say the accounts of “unsuspecting” investors, because the average investor, even the “high net worth” investor, believes the ratings accorded to various investments by the “independent” ratings agencies.

So Jane and John Doe dutifully adhere to the advice of their investment advisors, unaware that most of them completed a six-week course to become certified investment professionals and are no more qualified to evaluate investments than Bugs Bunny.

The phenomenon I am referring to in this roundabout fashion is the advent among the investing public of suspicion towards the system that allocates ratings to different investment types.

Going back to the macro versus the short-term view, the ability of the public to retain the long view becomes limited when bombarded daily with talking-head news bites that are delivered with urgency and dire sweeping generalizations. And the media and banks and the whole financial pyramid relies on this.

In macro terms, over the last decade we have seen most major investment banks pay huge fines for everything from insider trading to issuing excessively positive ratings on companies that were a source of investment banking fees. The recent perfidy on the part of investment bankers is evidence of a larger trend that seems to say, “Don’t trust anyone with your money.”

Here’s a simple rule to follow, one that Warren Buffet puts forth as a tenet of investing:

“If you don’t understand it, don’t invest in it.”

That applies to securities, debt instruments, futures and companies.

As Wall Street continues to find new ways to dupe investors into buying fabricated junk securities that are accorded low-risk ratings by duplicitous agencies, the investors who are able to retain the macro view, and tune out the non-stop sales pitch coming in the guise of news, are able to see the truth depicted in charts like the one above.

The TSX Venture is probably the most profitable and safest exchange in the world for investors with the skills and tools to navigate it safely.

To learn more about the TSX Venture Exchange, go here: http://www.angelnexus.com/o/web/2425